Property Letter 2

Posted by admin in Property Letters | May 19th 2002

Our e-mail address – accessing here daily without a problem – watsies@mweb.co.za James & Kate’s e-mail – forward to us daily – hallatt@compuserve.com

Exchange Rate – Approximately – ₤60 = €100

Vicky and I have returned to Italy for a weekend of consultation with respected family and friends (James, Kate, Bill and Ross). What we have seen and learned in France has been very interesting and encouraging, to the extent that we will return there on Tuesday for a further two weeks, and cancel all plans to go to Spain and Portugal. This was always going to be an option if prospects in the country of our first choice (France) looked good, as they do.

I must however emphasize at the outset that the property we have concentrated on seems a very good wealth builder in the medium and long term, but it is far less certain that it will provide sufficient income on its own for a family to live off on a month to month basis.

WHY FRANCE?

Financial Mail – 11th January 2002 – “If you really want to get out of rands and into property, go to Euroland. French property for instance, is going at bargain prices.”

There is an increase in demand for rental property combined with a decrease in supply. For this reason the French Government are sponsoring a ‘leaseback’ scheme where they guarantee the owner of rental property a minimum 6% net return, but the term of the agreement is 9 years. It is designed to encourage supply.

Earnings are in Euros, and not in Zim$ or Rand, or even sterling.

Sterling is likely to lose value in relation to the Euro in the next few years. Specifically it seems inevitable that the UK will go to the Euro soon, and when it does sterling will devalue or the Euro will revalue in the changeover.

And why specifically the Cote de Azur?

Firstly, and importantly, Vicky and I like it and if we are going to spend time somewhere, we’d like it to be there. We have visited it a number of times in the last 10 years, and have very good French friends who live there and hence some local knowledge and support, which is always an asset. We also speak French.

It is a fact of Europe today that people are demanding more and more access to sunshine, wherever they may live and work. Getaways by families or couples for a week or a weekend are commonplace, even in winter, and businesses are turning to sunny warm places for their get togethers. Menton, where our friends live, is the warmest town in France.

The Cote de Azure has superb beaches, a beautiful sea, a stunning backdrop of mountains and snow, and quaint and ancient villages. It is only an hour by car to some of France’s most famous ski slopes. What is not so well known is that 1.8 million business trips are made there each year. The ‘Silicon Valley’ of France is in a village between Antibes and Cannes called Sophia Antropolis. Technology companies from around the world are there, and the resident population employed in the industry is 30 000, most of whom live in Cannes or Antibes, and pressure on accommodation is intense. There are year round congresses, conventions and trade fairs, and over 200 national and international professional events attracting 300 000 delegates yearly. The development and
infrastructure to cope with this growth has been put in place over the last 20 years, and continues to improve. Cannes is undoubtably the centre of it all, and the most equipped, with Antibes (beautiful beaches) and Nice (big on schools, colleges, universities and sport) providing aspects, and support to Cannes.

More than 25 million tourists visit France each year. This is not a passing phenomenon, and with the new improved and cheaper transport links, the demand for self catering accommodation in France continues to grow, especially from Britain and northern Europe. Easyjet, Ryanair and Go Airlines are examples of the low cost airlines and Easyjet is advertised on billboards all over the Cote de Azur as offering Nice-Paris for €22. Ross flies from Milan to Frankfurt on Tuesday for €60 on Ryanair.

WHY PROPERTY?

At present what little Vicky and I have managed to get out of Zimbabwe in the last couple of years is invested in unit trusts or in the bank. The first earning us 0% if we’re lucky these last few quarters, and the second 3.75%, which is not very exciting. It is true however that the long term rate of increase in share values has been nearly 12% per year over the last 20 years in the U.K.

We spent a couple of months in Cape Town before we came to Europe looking at and analysing about 200 houses, and buying one for my cousin. The experience was at times exhausting, but always interesting, and we knew at the time that it was a training that would stand us in good stead on the road ahead. That experience has been very useful in France where we have looked at another 60 odd in the last week, and we continue to learn and grow.

Kiyosaki – “While millions work, pay more taxes and pour billions each month into mutual funds, the rich are quietly selling shares, and buying billions in investment real estate.”

Ray Croc (founder of McDonalds) – “My business is not hamburgers. My business is real estate.”

Russ Whitney – “I’ve made fortunes in a number of businesses, but I know from personal experience that real estate is the simplest, fastest and most productive way to generate significant sums of immediate cash, and it can help you lay the groundwork for even greater profits in the future. This is especially true for beginning investors.”

William Benke/Joseph Fowler – “We believe that real estate is one of those vehicles that provides the potential for a successful ride to financial security in this environment of modest inflation and even greater security in the event of greater inflationary turbulence in the days ahead.”

FIVE KEY FORMULAE :

All the properties we have analysed in France we have applied these five formulae to. The first is one that is commonly used and referred to by everyone involved in property in France, and they call it ‘rentability.’

Rentability.

They simply divide the expected annual income by the purchase price of a property, and express it as a percentage. They regard 7% as an acceptable figure, and anything in excess of that to be good.

Eg. Expected annual
income €15 000

Cost of
property
€100 000

Rentability
15%

Return on Cash Invested.

The easiest to see and the simplest to calculate. Your first year Return on Investment (ROI) is the net profit divided by the cash that it took you to buy the property.

Eg. Projected
annual gross rents €15 000

Annual
expenses
€ 8 000

Gross
profit

7 000

Debt service
(mortgage)
€ 6 000

Net
Profit

1 000

Cash invested – 25% deposit on purchase
price (75% mortgage) €25 000

Transfer
duties at
7%
€ 7 000

Fitted
kitchen
€ 3 000

Furniture

6 000

Total
investment
€41
000

Net Profit ROI (1 000 ÷ 41 000 × 100) = 2.44%

Appreciation.

There are two types.

Natural appreciation is the amount the market goes up, and one must estimate a figure based on averages for the country/region/town/district.

Forced appreciation is the addition of value through improvements or higher and better use.

Appreciation only turns into a cash profit when you sell or refinance the property, but it is a real return on your investment all the same.

Eg. Investment in
property

41 000

Purchase
price of
property
€100
000

Natural
appreciation estimated
10%

10 000

Forced
apprec. (fitted kitchen and
improved garden)

5 000 (cost of garden improvements absorbed

during
the year – largely
cosmetic)

New
Value of property at end of first
year
€115 000

Appreciation ROI (15 000 ÷ 41 000 × 100) =
36.58%

Equity Buildup.

A portion of each mortgage payment you make goes to reducing the principal (on a €75 000 loan over 15 years at 4.1%, it would be €3 583 in the first year, and €3 794, €3 920, €4 100 and €4289 in the next four). When rents are paying the mortgage, you consider the equity buildup as part of your profit, and a return on your investment. Again, it is a paper profit, but it is there when you need it (when you sell or refinance). It adds to your wealth.

Eg. Initial loan
amount €75 000

Amount applied to principal € 3
583

New
principal
balance
€70 000

Equity

buildup
€ 3 583

Equity Buildup ROI
(3 583 ÷ 41 000 × 100) = 8.74%

Tax shelter.

You are entitled to business related deductions on income tax. Often these deductions will offset some if not all income earned from various sources, and reduce overall tax liability. The deductions one can take are depreciation, interest, maintenance, management expenses, cleaning, etc. How much of a tax shelter you will receive depends on your tax bracket and sources of income. (5 to 15% would be normal)

Total ROI.

Return on cash
invested
2.44%

Appreciation
36.58%

Equity
Buildup
8.74%

Tax
Shelter
10.00%

Total
ROI
57.76%

Obviously year two is going to be better in many ways without startup costs, transfer duty, a new kitchen or furniture, and hopefully, with gained experience, and happy ‘comeback’ tenants, a higher occupancy. There is also an increased repayment of the capital outstanding, and a lesser portion that has to go towards interest from payments each month, and therefore a proportional increase in equity or ownership. (In the second year Equity buildup ROI is 9.14%, and in the fifth 10.46%, etc.)

The biggest factors affecting all of the above are the price of the property, and the number of weeks per year rented at what price, and importantly, the rate of capital appreciation one might expect in the area. Obviously Vicky and I have done a lot of work on these areas, and sought out the best properties we can in terms of value for money, position, view and state of building. We have been very pleased with what we found, although it took quite a few days to start to see a
bit of light.

What have we been looking for exactly?

We have, after looking fairly extensively, zeroed in on central Cannes, and Nice, and possibly Antibes. Particularly the area in Cannes known as the Croisette, which is the arc of land within easy walking distance of the sea front, beaches, and most importantly, the Festival Hall (where they hold the film festival and many other less well know events.), and the equivalent area of Nice. These areas hold the greatest potential for rentability year round. Typically we have worked on 40 weeks per year rented, with 9 of those at top rate, 4 at three quarter rate, and 27 at half rate. Some a little more because of what they are. We are told that we are being overly conservative, particularly in the Croisette. I hope that is so.

What we are aiming for is :

Holiday and conference accommodation rather than residential. i.e. weekly rentals.

Good flat.

Good building.

Good area.

Fair view.

Maximum rentability.

Appreciating value.

80% mortgage and low interest.

A positive cash flow even in the first year.

People have laughed at us and said we are unrealistic, especially on the last point. The generally accepted opinion is that in the first year, and maybe for a few, capital appreciation is where one must look for ones profit, and not to expect any cash to be left over. Indeed it may be necessary to accept a bit of a negative cash flow for a few years. We have said “No ways. We can’t afford that – we have to live off the income from the beginning.”

The properties we have identified so far are small, but meet all the criteria above. In any one of them we would very happily spend a weeks holiday ourselves. Some need a little work – some don’t.

WHY ELSE PROPERTY?

Passive income. You don’t have to spend 8 hours a day at your job to earn it. It comes in when you are asleep, sick, on holiday, and even retired, and offers the best tax shelter.

Leverage. It is simply the extent to which credit is used to finance an investment. Leverage pays off because it allows us to tie up property at a fraction of the total value, and to take advantage of the slowly depreciating value of the Euros used to pay off the debt over time. Leverage is one of the major advantages that property has over almost any other investment.

You couldn’t borrow money to buy stocks for example, and nor would you want. With property, if all else fails you still have the property, even if in adverse circumstances it may lose value in the short term. On the stock exchange, if all else fails, you have nothing!

Obviously, if your returns (total ROI) are greater than the rate of interest you are paying, then the earning on a €100 000 investment for which you have only had to invest €41 000, compare very favourably with the earnings you are likely to receive on a €100 000 investment that you have had to pay €100 000 for.

Other interesting facts on the UK market from Gill Fielding, who I was fortunate enough to talk to about our plans for an afternoon: (We hope to meet
her again when we return to the UK)

The majority of the richest people in the world have obtained most of their wealth through property.

In the year to September 2001 the annualized return on UK property was 15%.

Since 1956 the annual increase has been 8.5%

Rents have risen by 13% per year since 1962 on average.

Demand for rental property is increasing in both the private and the social sectors whilst the supply of houses is decreasing. In the private rental market supply has fallen from 12% of total housing stock to 10% between 1981 and 2001. In the social rented housing market, from 30% to 20%.

Part of the increase in demand has come from the young. In 1991 the average age of the first time buyer was 21, and in 2001 it was 29, so people are delaying buying and renting for longer.

The percentage returns on rental properties tend to increase the smaller the property.

Returns on rental properties:

o
House

with furnished bedsits 19.3%

o
1 bedroom flats
12.5%

o
2 bedroomed
flats
11.5%

o
2 bedroomed
houses
10%

o
3 bedroomed
houses
8.1%

o
4 bedroomed
houses
6.3%

·
The cheaper the property the higher the rate of return!!!

*

In the 32 years since the Department of the Environment started
to keep records, property prices have risen in 28 of them, and fallen in
4.
*

Approx. 11% of homes in the UK
are rented, compared to between 20 and 40% in the rest of Europe. (The Brits are great home owners)
*

Most if not all of the above apply equally or more so in
Europe, and in France
in particular

MORTGAGES.

We had a very good meeting with a major French bank – Entenial Bank – who specialize in lending.

We have an appointment with Barclays in Nice on Thursday.

Entenial have two proposals:

1 : They offer a 75% mortgage at 4.1% over 15 years,which is a floating rate that may only be adjusted once per year if at all. A fixed rate can be arranged, but at 5.86% . Normally they will only offer 70% to non residents, but very quickly agreed to 75% when I pressed them. They also said that we would get 80% elsewhere, so I think that they are prepared to go that far.

In addition, they offer an optional insurance scheme to cover the whole value of the property at the rate of .32% of the cost of the property per year, divided equally into monthly payments attached to the mortgage repayment. On a €100 000 property that equates to €26.66 per month and is very cheap in my
view.

2 : They offer a scheme whereby one pays interest only for the 15 year duration and they finance 100% of the property. It works like this: They pay for the
property and charge us 4.5% on it. We pay equal monthly installments for the whole term of the loan, which covers the interest only. i.e. on a €100000
property, €375 per month. But at the outset we place 40% of the value of the property in investment with them, on which they guarantee us a minimum return
of 4.5%. (Last year they achieved 5.4% for their clients.) It is calculated that at the end of the 15 years you will have paid for the property with that investment, and you may then collect your title deeds and any surplus that your original investment has earned.

The scheme has built into it an insurance policy, which in the event of death or permanent disability (percentage assessed) pays off the property completely,
and the 40% deposit, plus all that it has earned reverts to the surviving partner in full.

The first obviously allows you to start with a lesser amount up front, and therefore, say, three properties in your portfolio, earning for you, rather than two. Monthly repayments are significantly more though, and your cash flow more difficult.

The second involves a much higher down payment, less property, but much less each month in repayment, and so a more positive cash flow.

We have analysed both options for each property.

In either case, if you want to get out after five years there is no penalty. Before five years there is a penalty calculated according to how long the loan has run, but it may not exceed six months of interest. i.e. in case one, €2050 is the maximum possible penalty. In the event of selling one property to buy another using the same bank, I think the penalty falls away, but I have to clarify that next week.

Any non-resident individual can get the mortgage, but for our purposes, and in order to comply with the banks requirements in terms of qualification for the loan, it seems easiest to set up an “SCI” (probably for each property) which is a non trading company, or holding company, which costs about €200 to do, does not require an expensive notary or lawyer, and obviates the need for declaring personal details of annual income etc., which is a bit tricky for Zimbabwean farmers at this time for instance.

MANAGEMENT.

It is possible to hire a commercial firm to manage properties, but the route that I very much favour is to manage our own. Vicky and I will buy two or three apartments to start with, and I calculate roughly that in order to justify our own management company we will need to look after 20 or more. I hope that some of you see the merit of investing too, as this will also allow us to negotiate in many areas such as price, terms, mortgages and fees. We will seek out the balance of properties we need to make up to the number that we need to manage to be viable from outside the group.

(At this stage, and for the purposes of all of the workouts that we have done, we have taken the prices of properties at asking price, in the full knowledge that all but the new (off plan) apartments are subject to negotiation, and a lower purchase price than the one we have worked on. There may well be room to negotiate interest rates for mortgages, fees, and other costs too, the more so if we have numbers of properties. Some bargaining power.)

Charges are normally 15 to 20% of the
rental and the services provided are roughly :

*

Fees paid and receipted.
*

Full inventory control.
*

Contracts prepared and signed.
*

Checking and control of all keys.
*

Inspection and ensuring that toilets etc. are working.
*

Inspection for evidence of damp, leaking and condensation.
*

Inspection with regard to damage.
*

Doors, windows and gates locked.
*

Ensuring garden and pool maintenance is carried out.
*

Light bulbs replacement.
*

Water, electricity and gas working.
*

Removal of mail for the owner.
*

Fabric and furniture checks.
*

Fridge door left open when flat empty.
*

Regular monthly e-mail contact with owners, with property
appraisal.
*

Other services that can be organized and need coordination include – food parcels, airport pickups, laundry/maid services, babysitting, quotations for maintenance, building work, furniture refurbishments, etc.

A percentage is also charged for tenants secured by the management company, and obviously no charge for tenants secured by the owner.

I am hoping to establish such a company for us all, and as I have said before I have an interested Zimbabwean, a trained administrator, trusted and known to many of you, who is ready to live in France and do the job. No one will manage the properties as well as we will ourselves, especially in the critical first years.

MARKETING.

Marketing our apartments is a very important issue, and one to which we have applied a great deal of thought, and continue to do so. The field is so vast that I don’t think I can cover it today, in this brief. Suffice for the moment to say that we have some of the most valuable and professional advice that one could hope to get anywhere, right here in our family. James and Kate are both professional in the field, and Lao builds websites professionally. We will obviously use any or all of the following, and more :

*

Our own website.
*

National and international newspapers.
*

Local and regional newspapers.
*

Periodicals and magazines.
*

The French Government tourist board’s publications. (Cost
effective and widely referenced.)
*

Agencies abroad.
*

French letting agents.
*

Most importantly, word of mouth and repeat visitors.
*

Companies, conference organizers, festival organizers, etc.
*

And the ‘weekend special’ and ‘midweek special’ concepts in off
season. Tie up with airlines.

PROFESSIONAL ADVICE.

We had a meeting with a Mr. Pierre-Claude Rivier of Price Waterhouse in Nice, and will seek further advice as we go along.

The biggest issue seems to be tax status, and tax residence. The advice is to register in France, Britain, South Africa, or anywhere with a reciprocal tax
agreement with France (and therefore no possibility of double taxation) and pay your taxes. Clever stuff like registering companies offshore in Jersey, Cayman Islands or Monaco, is not recommended. Once the French authorities see that sort of arrangement they assume you are up to something, and get out their biggest magnifying glass to examine your affairs!

SCI’s are not limited liability companies, and exist solely for the arrangement of property transfers, and the accountants see no value in setting one up (except that the bank, as I have said, recommend it for their own reasons). There is no problem in setting up a limited liability company here if one wishes to, with a minimum of two shareholders. Accounts can be very simple.

TIMING.

This is my biggest worry.

Properties come on the market and then they are gone. Of course there are always others, but it takes time and effort to find them, and when you do locate a peach you don’t really want to lose it and start the process all over again. There is no guarantee at all that the properties that Vicky and I identified last week as good ones are still available, and of course the most desirable will be the least likely still to be there when we get back.

The process is :

You make an offer, and if it is accepted you put down a 10% deposit.

Then you have 7 days in which you can pull out for any reason, and get your deposit back in full.

Thereafter you are bound by French Law, under which anything signed is absolutely binding.

The only exception allowed is that it is legal and accepted that if you fail to get a mortgage for any reason the agreement falls away.

The mortgage takes a month to process, and the transfer takes two months from the date of agreement, not from when you get the mortgage.

WHAT MAY GO WRONG?

Our projections may be out. We have done the best we can, but can not vouch for them, as they may be out in either direction.

Every business has problems – but “people have been renting property for hundreds of years, and owners have been making profits from renting property for hundreds of years, and just because you buy a rental property doesn’t mean all the tenants are going to move out or the building will fall down.” (Whitney)

WHY DON’T MORE PEOPLE DO IT?

“Things may come to those who wait, but only those things left by those who hustle” (Abraham Lincoln)

The 95% rule :

“Most people are more negative than positive in their thinking and perception of life……..These people are victims of the 95% rule. They are the 95% of the population who will plod along, living their lives one day at a time, barely getting by and unable to plan for the future. Their dreams will never come close to reality…….

What’s different about the 5% who do achieve financial security? Intelligence? No. Timing? No. Location? No.

It’s the 95% rule!” (Whitney)

Fear.

“One of the scariest things I have ever done in my life was to buy my first piece of rental property. My wife and I both had knots in our stomach about the deal. But we knew that if we were ever going to get anywhere in life, we had to make the decision. We had to try.

We made the decision and it worked.

But what was even more scary than the first property was the second and the third. The first one worked but what if the second one didn’t? Were we getting greedy? Were we making a mistake that would wipe out everything we’d gained on the first property?” (Whitney)

Action.

‘If I said to you that you must go out and buy an income producing property with positive cash flow within 60 days or you would die, do you think you could do it? Of course you could. And if you could do one within 60 days, do you think you could do a second one within the following 30 days? The answer again, is yes.” (Whitney)

HOW DO WE PROCEED?

If you are seriously interested please let us know by return of e-mail. We have to know in the next couple of days whether we are looking for property for us, or for others too. I don’t mean you have to commit, but let us know if you are leaning towards it. The sooner we can start to find your property the better.

Price wise – €100 000 to €150 000 is the area we are looking in, cheaper being unacceptably tatty, and more expensive being less interesting in terms of return as far as we can see at this early stage . Look at the examples that we have already identified, which may still be available next week.

Not everyone can afford a whole apartment, and some may be interested in numerous. If you are in a situation where you would like to invest an initial sum in partnership, then let us know and if there are more than one, we can put you in touch with each other. Partnerships may be a very good starting option for many.

Sample cash outlay – Property : No 97 Santa Cruz

Cannes

One bedroom flat

Price
€106 700

Deposit –
25%
€ 26 675

Transfer
duties at 7% € 7 469

Kitchen
needed
€ 3 000

Furniture etc

7 000

Total
cash needed €44
144

SOURCES – ACKNOWLEGEMENTS.

French Property News – (monthly magazine in English)

All About Real Estate Investing – by William Benke and Joseph M. Fowler.

Building Wealth. From Rags to Riches Through Real Estate – by Russ Whitney.

Letting French Property Successfully – by Stephen Smith and Charles Parkinson.

101 Winning Ways to Wealth – by Gill Fielding.

The Cash Flow Quadrant – by Robert Kiyosaki.

Retire Young Retire Rich – by Robert Kiyosaki.

Buy to Let – The Key Steps – by Stuart Powers.

ANALYSES:

All are calculated at asking price. A 5% discount should in most cases be possible to achieve, but in a sellers market there is no guarantee.

In all cases a 15 year mortgage is assumed at a rate of 4.1%.

In all cases transfer duties are calculated at 7% of the purchase price.

Rental income is calculated according to a formula of assumed peak season rate for 9 weeks

75%
of peak
rate for 4 weeks.

50% of peak rate for 27 weeks.

Costs include all taxes, levies, advertising, insurance, amenities, repairs and maintenance and services.

Rentability, and all the other formulae are calculated according to the examples in Pages 2 to 4 above.

Natural Capital Appreciation is pegged at a conservative 12% for Cannes – the Croisette and Nice centre.

Tax Shelter is assumed at a constant 10% in all cases.

PROPERTY
: VILLA LERINS.

Cannes
– Palm Beach –
Croisette

3rd floor Studio

26.31 sq.m. habitable space.

Bath, no shower.

Sea veiw.

Street parking.

Cost of property :
€121
960

Deposit
30 490

Transfer
duty
8 537

Kitchen
included

Some furniture
needed 5 000

Redecoration not needed

Total investment
required = €44027

Rental income : 18440

Mortgage repayments (monthly : 681)
annually : 8174

Costs : 16759

Rentability
: 15.12%

Net
Profit ROI
:
3.82%

Capital
Appreciation ROI
:
33.24%

Equity
Buildup ROI :
9.93%

Tax
Shelter ROI
:
10.00%

TOTAL
EXPECTED RETURN ON CASH INVESTED : 56.99%

PROPERTY
: NO.97 SANTA CRUZ.

Cannes – Palm Beach – Cannes Point.

4th floor 1 bedroom

34 sq.m. habitable space

Bath and shower

View of gardens

Street parking

Cost of property
:
€106 700

Deposit
26 675

Transfer
Duty
7 469

Kitchen
3 000

Furniture
7 000

Redecoration not
needed

Total investment
required = €44 144

Rental income : 16540

Mortgage repayments (monthly 596) annually
: 7151

Costs : 15541

Rentability
: 15.50

Net
Profit ROI :
2.26

Capital
Appreciation ROI
:
29.82

Equity
Buildup ROI
:
8.66

Tax
Shelter ROI
:
10 00

TOTAL EXPECTED RETURN ON CASH INVESTED : 50.74%

PROPERTY : LE NEPTUNE.

Cannes
– Palm Beach –
Croisette.

2nd floor
Studio with childs bedroom.

32 Sq. m. habitable
space.

Shower only.

Excellent view of
sea.

Reserved parking.

Cost of property
:
€128 057

Deposit :
32
014

Transfer duty
:
8 964

Kitchen
:
3 000

Furniture :
7
000

Redecoration not needed

Total investment required
= €50 978

Rental income : 18 440

Mortgage repayments (monthly 715) annually
: 8583

Costs : 17210

Rentability
: 14.40%

Net
Profit ROI
:
2.41%

Capital
Appreciation ROI
:
30.85%

Equity
Buildup ROI
:
9.00%

Tax
Shelter ROI
:
10.00

TOTAL
EXPECTED RETURN ON CASH INVESTED : 52 26%

PROPERTY: MONTROSE.

Cannes – Inland of Croisette.

38 Sq. m. habitable space.

Bath and shower

Garden view.

Lockup garage and cellar.

Cost of property :

114
336

Deposit :
28
584

Transfer Duty :
8
004

Kitchen very good,
included.

Furniture
:
3 000

Redecoration not needed.

Total investment required = €39587

Rental income : 15 830

Mortgage payments (monthly 638) annually :
7663

Costs : 15 867

Rentability
: 13 85%

Net
Profit ROI :
-0.09%

Capital
Appreciation ROI
:
34.66
%

Equity
Buildup ROI :
12.07%

Tax
Shelter ROI :
10.00
%

TOTAL
EXPECTED RETURN ON CASH INVESTED : 56.64%

PROPERTY
: LOFT NO. 9 BIS RUE DE LA LIBERTE.

Nice – Centre

45 Sq. m. habitable
space.

Shower.

Rooftop view –
character.

Cost of property : €152 445

Deposit : 38 111

Transfer duty : 10671

Furniture : 5 000

Total investment
required = €53 782

Rental income : 18 200

Mortgage payments (monthly 787) annually :
9438

Costs : 18133

Rentability
: 11.94%

Net
Profit ROI :
0.12%

Capital
Appreciation ROI :
34.01%

Equity
Buildup ROI :
10.16%

Tax
Shelter ROI
:
10.00%

TOTAL
EXPECTED RETURN ON CASH INVESTED : 54.29%

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